Stocks
Description
This article is from the What Every Investor Should Know.
Stocks
Stocks may be designated as common, the most widely known form, or as preferred. The latter is so called because its holders have some priority over owners of common stock regarding dividends (and also in the distribution of assets if the company is liquidated or reorganized in bankruptcy). Preferred stocks generally do not possess the voting rights that common shares do.
Generally, stocks are traded in blocks or multiples of 100 shares, which are called round lots. An amount of stock consisting of fewer than 100 shares is said to be an odd lot. On an exchange, an order that involves both a round lot and an odd lot--say 175 shares--will be treated as two different trades and may be executed at different prices. Your broker will charge you a different commission on each trade, and will confirm each of them separately. These distinctions are not generally involved in trades executed in the OTC market.
Some stocks are "restricted" or "unregistered," so designated because they were originally issued in a private sale or other transaction where they were not registered with the SEC. Restricted or unregistered securities may not be freely resold unless a registration statement is filed with the SEC or unless an exemption under the law permits resale.
Continue to:
My Books
